Back in 1976, the Italian automaker Fiat had been badly battered by a global energy crisis and the resulting malaise infecting the global auto industry. In what Time Magazine described at the time as “a devastatingly ironic example of petropower,” Col. Muammar Gaddafi instructed his Libyan Arab Foreign Bank to invest some $415m into the Italian automaker, giving it a stake that would eventually grow to some 14 percent of the firm’s equity.

By 1986, Fiat’s Libyan stakeholders were becoming more trouble than they were worth. In the wake of the Lockerbie bombings, the US introduced sanctions on Libya, and Fiat’s Libyan connection left its attempts to bid for US military contracts (particularly those related to Ronald Reagan’s Strategic Defense Initiative) dead on arrival. As a result, Fiat and its shareholders bought back the entire 14 percent Libyan stake in the firm, presenting the Libyan Arab Foreign Bank-controlled Banca UBAE with a $3.1b check. And, according to what a Fiat spokesperson told us yesterday, that is where the story ends. But thanks to the now-ubiquitous Wikileaks, we have found that this story may in fact go farther than that. In fact, as the evidence stands right now, either the US State Department is working with bad information (which major news sources have yet to correct), or Fiat is lying about its ties to the embattled Gaddafi regime.

As with so many of the best stories in recent months, the major point of factual conflict in this tale comes from a Wikileaks-sourced US State Department memo. The memo, which does not appear at cablesearch.org, was provided to Reuters by an unnamed third party and was cited in a Reuters piece that focused on Gaddafi’s ownership of Wyndham Hotels. The Fiat connection isn’t made clear until well towards the bottom of the story, when Reuters reports

A 2006 U.S. State Department cable obtained by WikiLeaks and made available to Reuters by a third party describes LFICO/LAFICO [the Libyan Arab Foreign Investment Company]as Libya’s largest government-owned investment company, operating under the auspices of something called the “General People’s Committee” which has served as the Gaddafi government’s Ministry of Trade and Economy…

The State Department cable said that, as of 2006, LFICO’s holdings in Italy included 2 percent of Fiat, 15 percent of the Tamoil energy company, and 7.5 percent of Juventus, where a soccer-playing Gaddafi son, Saadi, once sat on the board. The cable said LFICO also had over $500 million worth of investments in Britain.

If the Gaddafi-controled LAFICO/LFICO held two percent of Fiat as recently as 2006, then the public narrative that had Fiat completely buying out its Libyan backers in 1986 is not completely accurate. In hopes of reconciling the discrepancy between the leaked memo (which presumably reflects the conclusions of the US intelligence community) and the public rejection of Libya’s equity stake in Fiat, we reached out to Fiat’s international media relations staff requesting clarification. The response, from Fiat’s Richard Gadeselli, came as follows:

Dear Mr Niedermeyer,

Further to your email, I would mention that the Reuters report you refer to is incorrect. As too are other similar mentions that have appeared recently in the media concerning the LIA’s holdings in Fiat.

The LIA sold all of its 14% shareholding in Fiat SpA in 1986 – ten years after its initial stake was bought. It no longer has a stake in Fiat SpA.

I trust that this clarifies the matter.

Unfortunately, it doesn’t clarify the matter at all. Either Mr Gadeselli isn’t telling us the whole story (which could be the case for any number of reasons, not all of the nefarious), or the Wikileaks memo cited by Reuters is incorrect, a possibility that is equally likely for a number of reasons. For one thing, we haven’t seen the leaked memo itself, and so we can not verify the exact source of the intelligence reported by Reuters. And even if we could verify that the US State Department and intelligence community had reason to believe that Gaddafi-backed investment funds continued to hold a stake in Fiat as recently as 2006, it’s conceivable that the US government had experienced a failure of intelligence. As a 2001 piece by businesstoday.com reports, Gaddafi’s own money manager Ali El Huwej has admitted that Libya uses a number of techniques to invest in Europe despite US sanctions.

Banca di Roma didn’t violate economic sanctions, because the stake was sold through Libyan companies rather than the Libyan government, Mr Brambilla said.

Though they were sporadically enforced, the sanctions nevertheless limited Libya’s room for manoeuvring in some countries. For example, Libya’s UK bank accounts were frozen and funds such as dividends from the Metropole stake could not be transferred to Libya.

That is why Lafico works to avoid detection when it makes investments, Mr Huwej says, adding that in everything it does, Lafico is aware the US is watching.

As such Mr Huwej sometimes avoids doing business under Lafico’s name. A farming company in Egypt owned by Lafico is registered there as simply Agriculture Investment Co., he says.

Another strategy employed by Libya is to keep stakes small or indirect, particularly in banking companies. Though bank investments are a small slice of Libya’s holdings, they’re among the most scrutinised by the authorities, as access to banks means access to money and the ability to move it around the world.

In any case, either Fiat isn’t telling the truth or the US Government was misinformed about Libyan ownership of a firm that is poised to take over the bailed-out US automaker Chrysler. In the interests of truth, we call on Fiat and Reuters to help resolve this factual discrepancy. If anyone knows where to find the Wikileaks memo in question or has any information regarding this story, we encourage them to send it to our contact form.

Some of Gaddafi’s antics seem like the realization of childhood daydreams: “When I grow up, I’m going to run my own country, and have a cadre of kick-ass female bodyguards who dress like Michael Jackson in that military-look phase, and…”

Um, not that I personally mused about having a cadre of kick-ass female bodyguards…

Most probably, she is of Commander in Chief of Ghaddafi’s female “Leibstandarte”
It seems, that they are doing a good job. He is still alive.
How are the bets on Ghaddafi and his bodyguards, btw? They all should be highly motivated, with their backs to the wall.

@wallstreet, you haven’t seen my Latina fiance. I may be a skinny white boy but I don’t want a woman that’s so slim I might break her in half if I’m not careful. (And I go for women who don’t want me to treat them like they might break.)

Umm, Ed, d’ya think it’s possible that since 1986, which was about 25 years ago, that Libya could have bought some FIAT shares? That isn’t against the law, and the last time I checked we have dropped sanctions against Libya.
There is this thing called the free market — wonderful idea.

There are many possible explanations for this mystery, and we can speculate about them until the cows come home, but right now we simply don’t know the truth. I took care in the piece not to suggest any one possible explanation for precisely this reason.
Also, US sanctions on Libya weren’t fully lifted until 2008. Besides, the legalisms of international sanctions are incredibly complex. I’m not laying out a legal case against Fiat, rather I’m simply pointing out the discrepancy between Fiat’s position and the State Department’s perception. When we get more information about this story, which I hope will be the result of this piece, we’ll have a better sense of what its legal and political implications are.

What I really want to know is how many Wall Street banks have interests in Libya since the USA lifted sanctions. They were the ones pressuring our government to lift the sanctions. It’s not like we were going to make a killing selling them cars. How about, how much stock does LFICO/LAFICO have in any American companies. Are we going to castigate these companies?

Anyone care to take a guess … why else would we be getting involved, other than “our – Wall Street interests”. Ohh, humanitarian efforts, keep stability in the region … were have I heard this before. I know this is the truth about cars not banks.

So an Italian company, which had no US operations during the sanction regime, may have had 2% of its public shares held by a Libyan bank?
Come on. There is nothing illegal under Italian law against having Libyan investments. Since the end of the US sanctions, there is nothing illegal, period. And given how much money Libya was investing in Italy, 2% of FIAT sounds, well, like even less of a big deal.
I’d be far more concerned with Trump’s lies about taking money from Libya to house his tent.

“For one thing, we haven’t seen the leaked memo itself, and so we can not verify the exact source of the intelligence reported by Reuters. And even if we could verify that the US State Department and intelligence community had reason to believe that Gaddafi-backed investment funds continued to hold a stake in Fiat as recently as 2006, it’s conceivable that the US government had experienced a failure of intelligence.”

Guys, going back to WWII is pretty lame for talking about owners heritage. Toyota helped Japan during WWII just like GM helped the US and VW helped Germany. Henry Ford getting the Grand Cross of the German Eagle doesn’t mean much.

To add to this, the list of people who received awards from Germany were high.
GM executive, IBM executive, Charles Lindbergh, the list goes on and on.

Toyota stated out as a manufacturer of textile looms. I’m not sure how that helped Japan in WWII, maybe someone else knows. Subaru on the other hand was created from the remains of Nakajima aircraft which made many type of airplanes for the military. As did Kawasaki. We all know about Mitsubishi of course.

I see two stars there on her shoulder, perhaps she’s a second rank virgin-lieutenant. how anal does one have to be to want to hire 22 virgins as his bodyguards…maybe in case he is blown up, he can make sure he gets there with the 22 virgins, just in case the prophecy of martyrdom suicide bombers rely on is not wholly accurate like Robin Williams once mentioned…